This week, the Public Utility Authority of Israel slashed solar equity returns in half from 14% to 7%. The new rate will be 69 agorot (US$0.17) per kilowatt hour down from 90 agorot (US$0.23). However, both the Authority and Energy and Water Ministry have stressed that the regulation applies only to non-domestic installations of up to 50kW, connected to the grid by August 1.
Eitan Parness of the Israel Renewable Energy Association has accused the Ministry of demanding the reduction.According to the Jerusalem Post, Parness said, “The Israeli government decided to provide incentives for solar entrepreneurs that will take part and assist in the production of electricity in the summer. But there are those in the Public Utility Authority who are interested in eliminating the entrepreneurship and eliminating the domain.”
In Parness’s opinion, the electricity regulation in Israel has no parallels anywhere else in the world, and the Authority unfailingly “abuses entrepreneurs,” making the public the “only loser.”“The decreased normative costs for constructing solar systems caused the government to slash the consumer’s equity yield in half. In doing so, however, the authorities are minimizing the entrepreneur’s return on his or her investment, he explained.
“By cutting the yields, the entrepreneurs will now need about 14 years to make up for their investments, as opposed to an original seven or eight years,” Parness said.A joint response from the Authority and the Ministry stressed that their ability to bring forward the additional 30MW allocation is another step to prevent electricity shortage expected in the summer.“Two months ago, we turned to the PUA requesting that it execute professional work necessary in order to bring forward the 2013-14 quota, as long as the government would consent to this, and on the condition that the tariff set in the arrangement would be fair and would not impose upon the citizen public an unnecessary burden,” Energy and Water Minister Uzi Landau said.